Medical Industry Outlook
Investment analysts foresee fundamentally positive business conditions in the medical products and devices industry during the coming year.
Although COVID-19 caused the industry to contract in early to mid 2020, the outlook for medical-industry manufacturing will improve with enhanced preventive protocols that support pent-up demand for elective medical procedures. Not all portions of the industry will recover equally quickly, however. Companies that produce dental and orthopedic implants may see a slower recovery than those whose products treat acute health challenges.
Some aspects of medical-device industry growth will slow as COVID-19 testing, vaccination and treatment change to reflect gradual advances in confronting the pandemic. The biggest unknowns lie in the unpredictability of COVID-19’s continued global effects and the uncertainties that surround vaccine development. At the same time, a growing aging population will continue to demand increased access to medical innovations to address the health needs that typically accompany age, such as implants for knee and hip replacement surgeries.
Products that rely on early research results for their viability can face difficulty in development. Firms that work with research-based companies need to focus on involvement with products that already benefit from solid feasibility analysis and risk reduction. Without testable, development-ready guidelines, no product can succeed. Likewise, manufacturers need a clear understanding of a realistic schedule that relies on as much proven technology as possible, to avoid surprises and production headaches.
Partnerships give manufacturers the ability to share risk and leverage complementary capabilities. These can involve new ventures with familiar companies and attempts to broaden the base of collaboration.
Manufacturing should expand as healthcare companies outsource some aspects of their research and development. If the firms that perform this outsourced work manage intellectual property appropriately and minimize the logistics of contract development, these outsourced (but not necessarily offshored) relationships can provide real opportunities.